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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Penns Woods Bancorp, Inc. (NASDAQ:PWOD), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Penns Woods Bancorp
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board R. Nestlerode bought US$107k worth of shares at a price of US$38.78 per share. So it’s clear an insider wanted to buy, at around the current price, which is US$43.90. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Penns Woods Bancorp share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 9086 shares worth US$341k. Penns Woods Bancorp may have bought shares in the last year, but they didn’t sell any. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Insider Ownership of Penns Woods Bancorp
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data indicates that Penns Woods Bancorp insiders own about US$6.9m worth of shares (which is 3.4% of the company). Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About Penns Woods Bancorp Insiders?
The fact that there have been no Penns Woods Bancorp insider transactions recently certainly doesn’t bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it’d be more encouraging if Penns Woods Bancorp insiders bought more shares in the company. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
But note: Penns Woods Bancorp may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.